The Federal Inland Revenue Service (FIRS) has disclosed that the Federal Government will continue to resort to borrowing despite the reported 411 percent increase in revenue collection. The tax agency explained that while the surge in revenue generation is a positive development, it remains insufficient to meet Nigeria’s rising fiscal obligations.
According to the FIRS, the government is grappling with enormous expenditure needs, including debt servicing, infrastructure development, security funding, and social welfare programs. These commitments, the agency said, far outweigh the current revenue inflows, making borrowing an unavoidable component of the government’s financing strategy.
Speaking on the matter, FIRS officials noted that the remarkable increase in collections was largely driven by improvements in tax compliance, digital innovations, and a broader tax base. They assured Nigerians that the agency will continue to strengthen enforcement and expand its revenue net in order to reduce the country’s reliance on loans in the long term.
However, critics have raised concerns about the government’s continued appetite for borrowing, warning that it could saddle future generations with unsustainable debt. Economic analysts argue that unless borrowing is tied strictly to productive investments that can generate returns, Nigeria risks worsening its fiscal crisis despite improved revenue performance.
The FIRS, on its part, defended the borrowing plan, insisting that strategic loans remain necessary to bridge budget gaps and sustain essential services. It stressed that the government cannot abruptly halt borrowing without risking a slowdown in economic growth and a possible disruption of critical national projects.
Stakeholders within the private sector have urged the government to complement revenue growth with fiscal discipline, transparency, and accountability in expenditure. They maintained that eliminating waste, tackling corruption, and cutting the cost of governance would go a long way in reducing Nigeria’s debt dependency.
As the debate continues, the federal government faces mounting pressure to balance its revenue achievements with prudent debt management, ensuring that increased collections translate into tangible improvements in infrastructure, job creation, and overall economic stability.
